US-based HfS Research firm has warned that the IT industry worldwide would see a net loss of about 1.4 million jobs, with countries like the Philippines, the United Kingdom, and the United States also taking hits. India’s IT services industry will lose 6.4 lakh “low-skilled” jobs to automation in the next five years. This would amount to a net decrease of 9% in the head count.
However, IT industry body- The National Association of Software and Services Companies (Nasscom) said that the report may not have taken into account all the new jobs being created by newer technologies.
“Nobody’s really seen what automation and robotics will really lead to. There will be some impact of automation but overall we believe that technology adoption will actually lead to more job creation across sectors,” Sangeeta Gupta, senior vice president at Nasscom, told ET. “Focus on talent increasingly has to be on skill and not scale. Jobs will exist in other places also, it’s not fair to say these many jobs will get eliminated.”
The IT-BPO industry employs 3.7 million and the impact of automation will mainly fall on those working in the BPO and infrastructure management space, both of which are adopting automation.
The HfS report states that low-skills jobs, those that follow a set process and are repetitive and do not require much in the way of educational qualifications, will fall by 30%.
These include jobs of repetitive processing, clerical duties and support services and in sectors such as administration, sales, transportation, construction, mining, energy, and production.
Medium skills jobs, those that require some amount of human judgement in the process, dealing with more challenging problems will increase by 8%.
High skilled jobs that require creative problem solving, analytics and critical thinking would be the ‘safest’ including those in computing, engineering, and science as people are needed to develop and service the technologies taking over from humans. These are set to increase by 57%.
Also expected to resist the advance are roles which need the creative thinking or interpersonal skills, such as positions in skilled management, arts and media, law, education, healthcare and financial services.
“We’ve already precisely pinpointed that 30% of routine, low-value positions are being phased out through automation over the next five years, far outweighing the expected new jobs being created in the medium-high skills areas,” Phil Fersht, CEO of HfS Research, said.
The HfS report is based on a survey of 1477 industry stakeholders. Though IT industry executives accept that automation will cause the number of people in the industry to fall, they are disputing the amount.
“This number is too high — 6.4 lakh seems too high,” said an IT industry executive, who declined to be identified.
“The BPO industry is going to be facing the problem of robotic process automation in the next two years. This is a challenge the industry and the country will face,” Asheesh Mehra, CEO of BPO firm Antworks, said.
One thing is sure, once automation takes over, people are going to lose jobs, though new jobs will be created.
The automation drive that began last year in Tech Mahindra has resulted in a loss of headcount by 2,000 in the last quarter.
Tata Consultancy Services, which has over 350,000 employees, said personnel addition had peaked at around 90,000 in FY16 and that it would hire fewer people going forward.
Accenture too has said it will not be hiring as many people.
“The total headcount, which we all expect will continue to grow less, than our revenues moving forward, due to the factors of automation and productivity in our operations,” Pierre Nanterme. Chairman and CEO of Accenture, said in a post-earning conference two weeks ago.